In the face of proposed budget cuts, the economic landscape of the United States hangs in the balance, with potentially far-reaching consequences for Tennessee. As the Republican Party deliberates on pivotal decisions that could shape the nation’s financial future, Tyler Coia delves into the potential repercussions for the state. These proposed reductions, coupled with a staggering $3 trillion addition to the deficit, have sparked concerns about the stability of the housing market, particularly in Tennessee.
The implications are far-reaching, as outlined by the US Department of Agriculture, encompassing increased costs for struggling families, uncertain futures for Veterans’ benefits, potential cuts to Section 8, and the removal of crucial support for rural renting communities. This looming uncertainty, experts warn, may further drive-up mortgage rates, compounding the challenges faced by Tennessee residents already contending with the economic aftermath of the pandemic.
Putting Millions on the Unwelcoming Doorstep of Homelessness
Housing advocates across the country are warning the public about House Republicans’ potential cutbacks, stating that rental aid would be torn away from hundreds of thousands of households who may face eviction and homelessness during this high-rent period.
In April, the House passed a measure that would diminish non-defense spending to last year’s level. According to the National Low Income Housing Coalition, this proposal would lacerate homelessness and housing programs by a ruinous 23%, hitting the Housing Choice Voucher Program (otherwise known as Section 8) particularly hard.
The Associated Press interviewed Diane Yentel, the CEO and president of the coalition, who highlighted how the proposed cuts would have dire impacts on communities’ abilities to deal with homelessness and rectify the housing crisis. Should the plans be enacted, official community entities would be forced to rip housing assistance from countless people who already have and depend on it.
Paring or Entirely Abolishing the Housing Choice Voucher Program (Section 8)
The fight to obtain federal action to deal with the country’s housing challenges has been slow-going, but unfortunately, these proposed cutbacks could see this already-less-than-stellar safety net return to the chopping block. In addition, worryingly for many, an article in The New York Times noted House Republicans developed their plan using a past Trump administration outline that suggests abolishing the Housing Choice Voucher program — a vital rental support source for 2.3 million households across the country.
To qualify for a voucher, Tennesseans must earn 50% of their area’s median income. Yet, three-quarters of the vouchers are reserved for renters considered “extremely low-income” — those who earn less than 30% of the region’s median income. Obtaining a voucher gives those who need it the most a chance to obtain housing on the private market by funding the difference between the amount they can afford to pay and their landlords’ rent charges.
President Joe Biden’s March proposal calls for increases to Section 8, ensuring that the program keeps pace with growing rental costs while extending offerings to an extra 50,000 homes. Naturally, this isn’t on the agenda of the House Republicans.
Luckily, Peggy Bailey, vice president for housing and income security at the Center on Budget and Policy Priorities, says that there’s good reason to believe the bipartisan support for Section 8 would stop it from being eliminated or pared dramatically. Bailey hastens to add that even minor decreases could compound in the future, leaving more of the population vulnerable to homelessness.
Eradicating Resources and Support for Rural Tenants
If the increased rates of homelessness and the potential for significantly pared Housing Choice Voucher program weren’t enough, the potential slashes could also eradicate USDA-funded rental assistance for those living in rural Tennessee, including the Single Family Housing Direct Home Loans.
Across the country, 63,000 current recipients of such funding would lose their unit contract, potentially forcing them into homelessness and undermining the still-limited affordable housing supply.
Leaving the Future of Veterans’ Benefits in Uncertain Hands
While Republican leaders mentioned that they don’t plan to cut veterans programs, the current bill’s wording doesn’t necessarily line up with that. Thus, there’s really no guarantee that veterans care is actually protected, which may stop them from receiving VA home loans and health assistance despite previously fighting for their country and the rights that they’ve more than earned.
According to a fact sheet from Democrat Rosa DeLauro, the debt limit bill provisions could end up costing veterans’ programs (accommodation-based included) $2 billion, demeaning the previous toil of policymakers and the veterans themselves.
Conclusion
In summary, the proposed GOP budget cuts carry profound implications for Tennessee’s housing landscape. The potential reduction in funding could exacerbate the challenges faced by countless already-struggling families, veterans, and rural tenants.
The looming threat to programs like the Housing Choice Voucher (Section 8) raises urgent concerns about housing security for millions nationwide. While bipartisan support may safeguard Section 8 for now, even minor decreases could have significantly far-reaching consequences.
With the potential for eradicating vital resources and support systems, it’s imperative to consider the long-term impact of these proposed budget cuts on the well-being of Tennessee’s residents.